The crypto market has been in a slump since the SEC accused Binance and Coinbase of listing unregistered securities last week.
The cryptocurrency market is in a critical development phase that could significantly determine the winners of blockchain mainstream adoption. The fact that different countries are coming up with respective crypto policies is a true testament that decades old financial systems need an update. Notably, Europe, Hong Kong, countries in the Middle East, El Salvador and the Central African Republic have all adopted varyingly favorable crypto policies. However, the United States and Nigeria, among other countries, are divided over crypto regulations.
Last week, the United States Securities and Exchange Commission filed charges against binance And Coinbase Global Inc (NASDAQ: COIN) to list unregistered securities. Notably, SEC Chairman Gary Gensler has argued that nearly all crypto assets are unregistered securities. Bitcoin as an exception. Interestingly, the Hinman documents used against the SEC in the Ripple lawsuit show that Ethereum Security was not considered by the former top officials.
Bernstein Analyst on Crypto Regulatory Crackdown Dilemma
The idea that all crypto tokens, other than bitcoin, are unregistered securities leaves no room for blockchain networks to achieve decentralization over time, according to analysts at Bernstein, a private wealth management advisory focused on high net-worth clients. . Additionally, analysts at Bernstein, led by Gautam Chugani, believe that the classification of crypto tokens as securities does not leave room for tokens to have functional utility within the underlying network.
“The key issue is whether countries should use securities laws created decades ago without realizing blockchain networks aimed to replace decades-old financial and securities market systems with greater transparency, instant settlement times, no intermediaries, automation, and reduced costs.” has to change with cost, global liquidity and interoperability,” Bernstein’s report noted.
It seems that the move by the United States SEC has influenced the Nigerian SEC to regulate the crypto market in a similar fashion. Last week on Friday, Nigeria’s SEC ordered Binance Nigeria to cease operations for issuing unregistered securities trading.
The United States and Nigerian governments control nearly half a billion people, more than 25 percent of global economic activity. As a result, blockchains other than bitcoin will have a challenging time implementing decentralization to their ecosystems.
In addition, Bernstein analysts concluded That different crypto regulatory realms are dividing both the blockchain industry and countries into jurisdictions. Arguably, crypto projects may be forced to provide services in the respective jurisdictions according to different regulations.
Ultimately, if regulations continue to prevail in individual jurisdictions, the fiat system will triumph through a CBDC. Still, regulations were imminent in the blockchain industry after mounting scandals and pulling of the rug. As a result, a faction of crypto enthusiasts have welcomed crypto regulations as a means to drive mainstream adoption.
Nevertheless, blockchain will have a challenging time rolling out its respective tokens in the future as regulations become stricter.
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